Roy Sebag

Roy Sebag (born June 28, 1985) is a contrarian investor and entrepreneur.^[1] In 2014, Sebag founded GoldMoney Inc and currently serves as the Chief Executive Officer. GoldMoney Inc is a gold savings/payments company publicly listed on the Toronto Stock Exchange.^[2][3][4] He is also the Founder, Chief Executive Officer, and 53% owner of Natural Resource Holdings, Ltd. a publicly traded company on the Tel Aviv Stock Exchange.^[5]

Early life

According to Robert J. Moriarty, who met Sebag on a tour of a company they had both invested in, Sebag showed promise as an investor from a very young age and is an autodidact.^[6]

Investment Partnership

Sebag describes his investment style as mix of contrarian value investing modeled after the late Benjamin Graham in his book The Intelligent Investor and the identification of asymmetry in the risk/reward dynamics of a potential investment. Sebag believes that financial events described in the black swan theory are not as rare as financial models predict.^[7]

On July 23, 2007, Sebag authored a letter entitled "Reality Approaching"^[8] where he discussed the housing bubble: "I feel that in the coming years reality will set in and the huge overhang of debt will become a burden on the global economy. I am not entirely sure as to how the economy will fare out of this cycle but I believe that it will be a long time before valuations are attractive again and our portfolio is positioned accordingly."

In March 2008, Sebag through Essentia Equity, provided seed financing to PPDai, a Chinese peer lending network.^[9] On November 15, 2013, PPDai closed received a $35 million investment from Alibaba Group.^[10]

In June and July 2010, Sebag through Natural Resource Holdings, invested in British Petroleum. His investment thesis was predicated on the long-term financial opportunity present in BP shares due to the Deepwater Horizon Oil Spill that occurred between 20 April 2010, and 19 September 2010.

In 2011, Sebag led an investment group that injected $43 million of rescue financing into American Apparel helping the company avert bankruptcy.^[11] In an interview with the fashion-industry trade journal Women's Wear Daily, Sebag was quoted as saying: ""We are contrarian investors and look for opportunities where the market has discounted companies for reasons that are temporary ... American Apparel is a perfect example of that. In my opinion, it's one of the greatest brands that's been created in the recent past — it went from zero to $550 million in sales in five years, has set countless trends, resonates with consumers around the world and is trading at a ridiculous valuation. Why? Because of sexual harassment lawsuits, an auditor resigning and employees being deported — which all makes for great headlines but has nothing to do with consumers around the world wanting to go into the stores and buying the product." ^[12]

In September 2012, Sebag invested in German automotive company Porsche Automobil Holding SE, which controls 50.73% of the voting rights in Volkswagen AG. In an interview with the financial newspaper Barron's, Sebag argued that the legal overhang due to the 2008 short squeeze of Volkswagen provided a unique opportunity to purchase shares of Porsche at a discount. He calculated the value of the shares at 100 euros.^[13]

Natural Resources and Gold

In 2010, Sebag formed Natural Resource Holdings, an asset consolidator of historically delineated natural resource deposits. In his 2013 letter, Sebag explained that "gold and finite natural resources (what I define as money in our present global economy which relies on 100% fiat based mediums of exchange) have become cornerstones of my investment process", citing the fiat money system as being the chief enabler of debt which leads to unnecessary financial bubbles, and defers savings.^[14]

In an interview with Max Keiser, Sebag explained that his view of financial markets and the economy changed following the financial crisis of 2007–08, and he began to develop a deep interest in gold.^[15]

Since 2011, Sebag and his team at Natural Resource Holdings have been compiling and distributing a database of the world's largest gold mines.^[16] Sebag would later claim that this laborious work helped him understand the relative crustal abundance of the elements and how gold ascended as money.

Roy Sebag and Josh Crumb, with Max Keiser and Stacy Herbert

Goldmoney Inc.

Following the 2008 financial crisis, Sebag met Josh Crumb, a senior metals strategiest at Goldman Sachs, and the two developed the idea of a full-reserve banking gold-based financial institution. This ultimately led to the formation and launch of BitGold, which subsequently became GoldMoney.

In May 2016, Sebag published two patents for Systems Concerning Gold Commerce and Converting Digital Wallet Value to Physical Gold Bullion^[17] According to the patent, the software system allows consumers with gold stored in one or more vaults to purchase goods or services using an electronic commerce system which calculates the quantity of gold to match the purchase price of the goods or services the consumer wants to buy. The system then facilitates the transfer of ownership of the buyer's quantity of gold in the one or more vaults to the seller's vault which represents the payment for the good or service. The software allows consumer transactions to happen in continuous sequences, while the underlying medium of gold remains vaulted during and after the transaction unless the owner requests a transfer or withdrawal from its present vault. The software allows goods or services to be purchased electronically with gold that is stored in a vault.^[18]

In May 2016, Sebag won the Canadian Capital Markets Deal of the Year Award by acquiring GoldMoney in 2015.

In July 2016, Sebag was nominated for the Ernst & Young Entrepreneur of the Year Award in Canada.

References